KC developer talks about plans for upscale apartments at Heer's

May 17, 2013

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Kansas City-area developer Jim Nichols says he’s learning that, when it comes to the Heer’s building, there’s no shortage of public interest.

“It’s a cool building,” said Nichols, the CEO of the Lee’s Summit-based Dalmark Group. “We’re excited about the opportunity to do it.”

On Friday, Nichols said he and his partner, Ernie Straub of Straub Construction, plan to renovate the long-vacant department store into “market-rate, luxury-style apartment homes.”

Details of the plan are still a work in progress, he said, but a news release with more information should be available by Monday.

Operating as Heer’s Luxury Living, LLC, the partners have asked the city to help develop term sheet and redevelopment agreement outlining some of the tax incentives that could be available for the project.

Vacant since 1995, the building has been in limbo since St. Louis developer Kevin McGowan mothballed his $29 million renovation plan in 2010.

Now a Kansas City-area development company wants the city to discuss possible incentives as it works on another redevelopment plan.

As it has for other potentially complex redevelopment projects, the city is asking the developers to fund preparation of the plan. A bill on City Council’s agenda on Monday requires the developers to deposit up to $20,000 to pay for outside legal counsel.

An explanation sheet attached to the bill says the developer, Heer’s Luxury Living, LLC, wants to put together a term sheet and redevelopment agreement “identifying the level of incentives which will be requested and the obligation of the developer to rehabilitate the Heer’s building.”

Once finished, City Council still would have to approve any local incentives offered as part of the financing plan, which could include state and federal tax credits or loans as well as private equity.

A legal agreement included with the bill specifically mentions property tax abatement — a common benefit granted to downtown redevelopment projects — as one incentive being explored.

Several special tax districts that were created in the course of earlier, failed renovation efforts also could be reactivated or amended.

A term sheet City Council approved shortly before McGowan’s project collapsed also included a $2 million, low-interest loan from the city’s Small Business Development Loan program, plus another $1 million loan the city agreed to borrow from the state on McGowan’s behalf.

The council bill sheds little light on the developer’s plans for the building.